Just entering the property market today, this three-bedroom terraced property on Milner Road, Gillingham is up for auction on the 13th June and presents a perfect opportunity for a student let. You may have read the investor alert (link) about a similar property on Milner Road at the start of this month, which still remains on the market for offers over £210k.
Milner Road is an excellent location for a student house of multiple occupation (HMO) in Medway as it is only around half a mile from Gillingham station and less than a mile walk to the campus. Liberty Quays is opposite with a bar and shops, as well as an Asda superstore being only a nine-minute walk away. Students will love this property!
As a four-bedroom student let it could bring in £21,480 a year (if let for 12 months). After talking with a builder contact of mine who has conducted renovations on this road, I estimate that costs would be between £28k-£32k depending on the state of the interior. Even with a £32k renovation spend you could be looking at a 10%+ gross yearly yield if you can buy the property for £176,160 or less (plus a whopping £6,640 Stamp Duty Land Tax). Don’t forget to factor in the legals and mortgage costs.
But remember that void periods can be up to two months for student lets in Medway, as students prefer to go home for the summer, so make sure you factor this in. This can be mitigated by doing short lets to foreign students over the summer or accepting only students not in their final year and who are willing to take 12-month contracts. Your chances of finding students accepting 12-month contracts is higher if you undertake a high specification for renovation as well as enact plan for marketing the property the correct way and at the right times.
So if you can get this anywhere near the guide price, or find out upon viewing that renovation costs could be lower, then you may be onto a good return on this one. As you may well know from my post the other week on Kent auctions, prices can spiral out of control if bidders are bidding on emotion rather than the numbers. So make sure you work out what the net yearly yield will be including renovation costs and after bills, mortgage costs, tax and void periods.